Correlation Between American Eagle and WillScot Mobile
Can any of the company-specific risk be diversified away by investing in both American Eagle and WillScot Mobile at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining American Eagle and WillScot Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Eagle Outfitters and WillScot Mobile Mini, you can compare the effects of market volatilities on American Eagle and WillScot Mobile and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in American Eagle with a short position of WillScot Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and WillScot Mobile.
Diversification Opportunities for American Eagle and WillScot Mobile
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and WillScot is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Outfitters and WillScot Mobile Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WillScot Mobile Mini and American Eagle is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on American Eagle Outfitters are associated (or correlated) with WillScot Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WillScot Mobile Mini has no effect on the direction of American Eagle i.e., American Eagle and WillScot Mobile go up and down completely randomly.
Pair Corralation between American Eagle and WillScot Mobile
Assuming the 90 days trading horizon American Eagle Outfitters is expected to generate 1.19 times more return on investment than WillScot Mobile. However, American Eagle is 1.19 times more volatile than WillScot Mobile Mini. It trades about 0.02 of its potential returns per unit of risk. WillScot Mobile Mini is currently generating about -0.01 per unit of risk. If you would invest 1,362 in American Eagle Outfitters on November 2, 2024 and sell it today you would earn a total of 208.00 from holding American Eagle Outfitters or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Eagle Outfitters vs. WillScot Mobile Mini
Performance |
| Timeline |
| American Eagle Outfitters |
| WillScot Mobile Mini |
American Eagle and WillScot Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and WillScot Mobile
The main advantage of trading using opposite American Eagle and WillScot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, WillScot Mobile can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in WillScot Mobile will offset losses from the drop in WillScot Mobile's long position.| American Eagle vs. FIH MOBILE | American Eagle vs. Iridium Communications | American Eagle vs. Zoom Video Communications | American Eagle vs. Singapore Telecommunications Limited |
| WillScot Mobile vs. United Rentals | WillScot Mobile vs. Ashtead Group plc | WillScot Mobile vs. AMERCO | WillScot Mobile vs. Avis Budget Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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